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Brief Contents
Preface xii
CHAPTER 9 Property, Plant, and Equipment and Intangibles 588

CHAPTER 10 Current Liabilities 672
CHAPTER 11 Partnerships 725
CHAPTER 12 Organization and Operation of Corporations 772
CHAPTER 13 Corporate Reporting: Profit, Earnings Per Share, and
Retained Earnings 831
CHAPTER 14 Bonds and Long-Term Notes Payable 880
CHAPTER 15 Accounting for Debt and Share Investments 944
CHAPTER 16 Reporting and Analyzing Cash Flows 981
CHAPTER 17 Analyzing Financial Statements 1054
APPENDIX I Payroll Liabilities A-1
APPENDIX II Financial Statement Information A-2
APPENDIX III Chart of Accounts A-24
vii
Contents
Preface xii Glossary 635
Concept Review Questions 637
Quick Study 637
CHAPTER 9
Exercises 641
Property, Plant, and Equipment and Problems 651
Intangibles 588 Alternate Problems 660
Property, Plant and Equipment (PPE) 590 Analytical and Review Problem 669
Cost of PPE 592 Ethics Challenge 669
Subsequent Expenditures 592 Focus on Financial Statements 670
Critical Thinking Mini Case 671
PPE Subledger 594
Low-Cost Asset Purchases 594
Land 595 CHAPTER 10
Land Improvements 595 Current Liabilities 672
Buildings 595 Characteristics of Liabilities 674
Leasehold Improvements 596 Defining Liabilities 674
Machinery and Equipment 596 Classifying Liabilities as Current or Non-Current 675
Lump-Sum Asset Purchase 596 Current Liabilities 675
Depreciation 597 Non-Current Liabilities 675
Reporting Depreciation on Assets 598 Current Portion of Long-Term Debt 676
Factors in Calculating Depreciation 599 Balance Sheet Presentation of Current Liabilities 677
Depreciation Methods 601 Known (Determinable) Liabilities 678
Partial-Year Depreciation 608 Trade Accounts Payable 679
Revising Depreciation Rates 610 Payroll Liabilities 679
Impairment of PPE Assets 614 Provincial Sales Tax (PST), Federal Goods and
Mid-Chapter Demonstration Problem 615 Services Tax (GST) Payable, and
Solution 617 Harmonized Sales Tax (HST) 680
Disposals of PPE 618 Unearned Revenues 685
Discarding PPE 618 Mid-Chapter Demonstration Problem 686
Selling PPE 620 Solution 687
Exchanging PPE 621 Current Notes Payable 687
Intangible Assets 622 Estimated Liabilities (or Provisions) 690
Accounting for Intangible Assets 623 Customer Awards/Loyalty Programs 691
Patents 623 Warranty Liabilities 692
Copyrights 624 Income Tax Liabilities for Corporations 694
Mineral Resources 624 Contingent Liabilities 695
Trademarks and Trade Names 625 Summary 697
Leaseholds 625 Demonstration Problem 698
Goodwill 626 Solution 699
Summary 627 Glossary 701
Demonstration Problem 630 Concept Review Questions 702
Solution 631 Quick Study 703
Appendix 9A Revised Depreciation When There Is a Exercises 705
Subsequent Capital Expenditure That Creates Problems 712
Partial-Period Depreciation 633 Alternate Problems 716
Summary of Appendix 9A 635 Ethics Challenge 720
viii
CONTENTS
Focus on Financial Statements 720 Mid-Chapter Demonstration Problem 787

Critical Thinking Mini Case 722 Solution 788
Comprehensive Problem 722 Dividends 789
Cash Dividends 789
CHAPTER 11 Special Features of Preferred Shares 791
Partnerships 725 Dividend Preference 791
Other Features of Preferred Shares 794
Partnership Form of Organization 727 Closing Entries for Corporations 795
Characteristics of General Partnerships 727 Financial Statement Analysis 797
Limited Partnerships 729 Summary 799
Limited Liability Partnerships 729 Demonstration Problem 801
Basic Partnership Accounting 730 Solution 802
Organizing a Partnership 730 Glossary 804
Dividing Profit or Loss 731 Concept Review Questions 805
Partnership Financial Statements 737 Quick Study 805
Mid-Chapter Demonstration Problem 738 Exercises 810
Solution 739 Problems 816
Admission and Withdrawal of a Partner 741 Alternate Problems 822
Admission of a Partner 741 Analytical and Review Problems 827
Withdrawal of a Partner 744 Ethics Challenge 828
Focus on Financial Statements 828
Death of a Partner 745
Liquidation of a Partnership 745
No Capital Deficiency 746
Capital Deficiency 747 CHAPTER 13
Summary 749 Corporate Reporting: Profit, Earnings
Demonstration Problem 751 Per Share, and Retained Earnings 831
Solution 752
Glossary 753 Additional Share Transactions 834
Concept Review Questions 754 Share Dividends 834
Quick Study 754 Share Splits 836
Exercises 756 Repurchase of Shares 838
Problems 761 Mid-Chapter Demonstration Problem 840
Alternate Problems 765 Solution 841
Analytical and Review Problems 769 Financial Statement Presentation and Analysis 842
Ethics Challenge 770 Earnings Per Share (EPS) 842
Focus on Financial Statements 770 Dividend Payout Ratio 846
Critical Thinking Mini Case 771 Reporting Profit Information 847
Comprehensive Income 849
CHAPTER 12 Retained Earnings 851
Organization and Operation Restricted Retained Earnings 852
of Corporations 772 Accounting Changes 852
Summary 855
Corporate Form of Organization 774
Demonstration Problem 856
Characteristics of Corporations 774
Solution 857
Organizing a Corporation 776
Glossary 858
Corporate Financial Statements 778
Concept Review Questions 858
Income Statement 778 Quick Study 859
Statement of Changes in Equity 779 Exercises 861
Balance Sheet 779 Problems 868
Issuing Shares 781 Alternate Problems 873
Accounting for Shares 782 Analytical and Review Problem 877
Motivation for Preferred Shares 786 Ethics Challenge 878
ix
CONTENTS
Focus on Financial Statements 878 CHAPTER 15

Accounting for Debt and Share
Investments 944
CHAPTER 14 Purpose of Debt and Share Investments 946
Bonds and Long-Term Notes Classification of Investments 947
Payable 880 Accounting for Non-Strategic Investments 949
Accounting for Equity Investments (Non-Strategic) 949
Basics of Bonds 882
Accounting for Debt Investments 951
Advantages of Bonds 882
Mid-Chapter Demonstration Problem 955
Disadvantages of Bonds 884
Solution 956
Types of Bonds 885
Accounting for Investments in Associates 958
Bond Issuing Procedures 886
Accounting for Investment in Subsidiaries: Business
Bond Trading 887
Combinations 960
Accounting for Bonds 888
Summary 963
Issuing Basic Bonds—Par Value Bonds 888 Demonstration Problem 964
Issuing Bonds Between Interest Dates 889 Solution 965
Bond Pricing 890 Glossary 966
Present Value of a Discount Bond 890 Concept Review Questions 967
Present Value of a Premium Bond 891 Quick Study 968
Issuing Bonds at a Discount 892 Exercises 970
Amortizing a Bond Discount 893 Problems 973
Issuing Bonds at a Premium 896 Alternate Problems 976
Amortizing a Bond Premium 897 Analytical and Review Problem 978
Summary of Bond Discount and Premium Behaviour 898 Ethics Challenge 978
Accruing Bond Interest Expense 898 Focus on Financial Statements 979
Bond Retirements 900 Critical Thinking Mini Case 980
Bond Retirement at Maturity 900
Bond Retirement Before Maturity 901 CHAPTER 16
Bond Retirement by Conversion to Shares 901 Reporting and Analyzing Cash
Mid-Chapter Demonstration Problem 902 Flows 981
Solution 903
Basics of Cash Flow Reporting 983
Long-Term Notes Payable 906
Purpose of the Statement of Cash Flows 983
Interest-Bearing Notes 906
Importance of Cash Flows 984
Instalment Notes 907
Measuring Cash Flows 984
Mortgage Notes 910
Classifying Cash Flows 985
Lease Liabilities 911
Financial Statement Analysis 914 Non-Cash Investing and Financing Activities 987
Debt to Equity Ratio 914 Format of the Statement of Cash Flows 988
Summary 915 Preparing the Statement of Cash Flows 989
Demonstration Problem 917 1. Calculate the Net Increase or Decrease in Cash 991
Solution 918 2. Calculate and Report Net Cash Inflows (Outflows)
Appendix 14A PV Tables 920 From Operating Activities 991
Glossary 921 Indirect Method of Reporting Operating
Concept Review Questions 922 Cash Flows 992
Quick Study 923 Mid-Chapter Demonstration Problem 997
Exercises 926 Solution 998
Problems 933 3. Cash Flows From Investing Activities 998
Alternate Problems 937 4. Cash Flows From Financing Activities 1000
Ethics Challenge 941 5. Proving Cash Balances 1003
Focus on Financial Statements 941 Cash Flows From Operating Activities—Direct
Critical Thinking Mini Case 943 Method 1004
x
CONTENTS
Demonstration Problem—Direct Method 1009 Ratio Analysis 1070

Solution 1010 Liquidity and Efficiency 1070
Summary of Reporting and Analyzing Solvency 1076
Cash Flows 1010 Profitability 1078
Summary 1012 Market 1081
Glossary 1021 Summary of Ratios 1083
Demonstration Problem—Part A: Summary 1085
Indirect Method 1014 Demonstration Problem 1086
Solution 1015 Solution 1087
Demonstration Problem—Part B: Direct Method 1018 Glossary 1088
Solution 1019 Concept Review Questions 1089
Concept Review Questions 1021 Quick Study 1090
Quick Study 1022 Exercises 1094
Exercises 1028 Problems 1100
Problems 1035 Alternate Problems 1106
Alternate Problems 1041 Analytical and Review Problems 1112
Analytical and Review Problems 1047 Ethics Challenge 1115
Ethics Challenge 1050 Focus on Financial Statements 1116
Focus on Financial Statements 1051 Critical Thinking Mini Case 1118
APPENDIX I
CHAPTER 17 Payroll Liabilities A-1
Analyzing Financial Statements 1054
Basics of Analysis 1056 APPENDIX II
Purpose of Analysis 1056 Financial Statement
Four Key Building Blocks of Financial Statement Information A-2
Analysis 1057
Information for Analysis 1057 Danier Leather A-3
Standards for Comparisons 1057 WestJet A-8
Tools of Analysis 1058
Indigo Books and Music Inc. A-14
Horizontal Analysis 1058
Trend Analysis 1062 Telus A-19
Vertical (or Common-Size) Analysis 1063
Common-Size Statements 1063 APPENDIX III
Common-Size Graphics 1065 Chart of Accounts A-24
Mid-Chapter Demonstration Problem 1066 Index IN-1
Solution 1068
xi
Preface
A Note About Our Cover
The cover of the Fifteenth Canadian Edition is the work of Rachel
Idzerda. Rachel’s playful illustration spotlights many of the companies,
entrepreneurs, and organizations featured in Fundamental Accounting
Principles’ 17 chapter opening vignettes. See if you can spot the images
representing Zane Caplansky’s food truck (Chapter 1), Frogbox’s green
moving supplies (Chapter 3), Kicking Horse Coffee (Chapter 11), or
ZooShare (Chapter 14). Rachel is a freelance illustrator specializing
in editorial illustration and portraiture. She combines clean, delicate
linework with bold colours and graphic elements to create a sense of
energy and mood in her work. Rachel received her BAA in Illustration
from Sheridan College in 2012, and currently lives and works in Montreal,
QC with her partner and their two pampered dogs.
Inside the Chapters

As educators, instructors strive to create an environment that fosters learning and provides students with
the tools they need to succeed. The Fifteenth Canadian Edition continues to meet and surpass the high
standards the market expects from Fundamental Accounting Principles. We continue to put learning
first, with student-centred pedagogy and critical thinking lessons throughout the text.
All the pedagogical tools are carefully designed for ease of use and understanding, helping the in-
structor teach and giving the students what they need to succeed.
Pedagogy
STUDENT SUCCESS CYCLE
Student Success Cycle
Student success at the post-secondary level is not measured by how
Read the material
much knowledge a student has acquired, but rather by how well a stu-
dent can use knowledge. The Student Success Cycle, illustrated by a
circular icon, reinforces decision-making skills by highlighting key Apply
Do the
your critical
exercises
steps toward understanding and critically evaluating the information thinking skills
the student has just read. Read–Do–Check–Apply reinforces active

learning rather than passive learning. This tool is integrated throughout
Check your answers
the text, including the chapter opening page, Checkpoint questions,
Lar87271_ch06_390-458.indd Page 392 10/8/15 4:35 PM user /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
Demonstration Problems, and end-of-chapter material.
CRITICAL THINKING CHALLENGE

An essential element of critical thinking is the abil-
Would Amazon have a merchandise turnover similar to Lululemon
ity to ask questions while reading (or listening or CRITICAL Athletica’s? Explain why or why not. What does “inventory demand
THINKING planning” refer to? What would the effect be of cost-saving strategies
speaking). These exercises are designed to help CHALLENGE on the weighted average cost of inventory?
students develop the skills related to questioning.

Suggested answers are posted on Connect.
xii
PREFACE
IFRS AND ASPE—THE DIFFERENCES IFRS AND ASPE—THE DIFFERENCES

International Financial Reporting Standards Accounting Standards for Private Enterprises
Difference (IFRS) (ASPE) This box appears at the end of every chapter to
Recording adjusting • IFRS require that financial statements be • Unlike IFRS, ASPE does not explicitly require
entries presented at least annually*; therefore,
adjustments would be prepared at least
that financial statements be presented at
least annually although it is implied given that
highlight any differences or important points
annually. However, for publicly listed financial statements must be presented in a
companies, Securities Commissions’ Law
requires publicly listed companies to present
timely manner** and items must be
presented consistently from period to
about reporting and terminology as they relate to
quarterly financial statements, which, in turn, period.*** Financial statements are prepared
would require that adjusting entries be at least annually for tax purposes and, for the financial accounting course. The chapter con-
prepared at least quarterly. example, to meet any banking requirements.
• Both public and private enterprises may prepare adjusting entries more frequently, such as tent is IFRS 2014 compliant for Volume I and IFRS
monthly, to enhance the accuracy of information required for decision making.
Depreciation vs. • IFRS uses the term depreciation**** (although • ASPE uses the term amortization.****** 2015 compliant throughout Volume 2; references
amortization it uses amortization for intangible assets).*****
*IFRS 2014, IAS 1 Para. 36.
**ASPE, Accounting Standards, Section 1000.17(b).
are provided where appropriate.
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***ASPE, Accounting Standards, Section 1000.19–20.

****IFRS 2014, IAS 16 Para. 6.
*****IFRS 2014, IAS 38 Para. 8.
******ASPE, Accounting Standards, Section 3061.16.
REAL-WORLD FOCUS
The Fifteenth Canadian Edition has increased A business is an entity represented by one or more individuals selling products or services for profit.
Products sold include anything from athletic apparel (CCM, Bauer, Lululemon, NIKE, Reebok), to
the use of real business examples to reflect the electronic devices (Apple, Dell, Hewlett-Packard, Samsung), and clothing (Abercrombie and Fitch,
GAP, Zara). Service providers such as data communication providers (Bell, Rogers, and Telus), food
most current information available. This contin- services (McDonald’s, The Keg, Starbucks, Tim Hortons), and internet services (Google, Twitter,
Skype, Facebook, Instagram) make our lives more connected. A business can be as small as an in-home
ues the text’s strong ties to the real world of ac-
counting, be it through detailed interviews with businesspeople for the chapter opening vignettes,
examples of ethical standards and treatments, or annual reports for both in-chapter example disclosures
and end-of-chapter material. When an actual business is used, its name is highlighted in bold magenta
for emphasis. This integration with real-world companies helps engage students while they read.
Food Truck Frenzy

Across the country, major urban centres are experiencing an industry trend to go to the street to entice custom-
ers with a wide range of made-to-order food options. In Canada, the street Lar87271_ch08_527-588.indd Page
vendor industry is in the growth 551 10/27/15 3:13 PM f-500
phase /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
of its industry life cycle, according to IBISWorld, a global market research firm. IBISWorld estimates the market
for street vendors in Canada to be strong over the next five years with revenues expected to reach $281 million in
2018 and expected annual growth to cap out at 4.2% in 2015. The market is dominated by new market entrants—
in most cases individual owners operating as sole proprietors. The most successful street vendors will take advan-
tage of effective marketing and branding toward health-conscious consumers looking for unique dining options.
Thundering Thelma received her initial debut on CBC’s Dragons’ Den when owner Zane Caplansky decided NEW VIDEO LINKS
to expand his famous brick-and-mortar deli in downtown Toronto and enter the trendy urban food truck busi-
ness. After being labelled “insane Zane” by Kevin O’Leary, and the other Dragons balking at the 15% ownership
interest at a proposed cost of $350,000, Zane decided to continue his new business venture on his own. A year
This text features interactive digital links direct-
later, Caplansky returned to Dragons’ Den and boasted achieving profit margins between 30 and 40% and
Lar87271_ch08_527-588.indd
achieving $110,000 in sales in his first six months of operation. Caplansky’s Pagetwo
business continues to thrive with 527 10/27/15 3:13 PM f-500 ing students and instructors to helpful videos to
/202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
new locations opening at the Toronto Pearson Airport, one modelled after his brick-and-mortar restaurant and
the other modelled after his food truck. provide students with real world application of
Sources: http://clients1.ibisworld.ca/reports/ca/industry/industryoutlook.aspx?entid=1683, accessed April 15, 2014; http://www.torontolife.com/daily-dish/people-dish/2011/11/03/
zane-caplansky-on-dragons-den, accessed April 15, 2014; http://www.postcity.com/Eat-Shop-Do/Eat/November-2013/Weekly-Restaurant-Recap-Harvest-Kitchen/;CBC Dragon’s Den,
Season 7, Episode 11, aired January 7, 2013. the chapter content and enhance student exposure
Video Link: http://www.cbc.ca/dragonsden/episodes/season-7/episode-11-season-7
to valuable online resources.
NEW: A LOOK BACK, A LOOK AT

THIS CHAPTER, A LOOK AHEAD Receivables
In these brief paragraphs, students A Look Back
Chapter 7 provides an introduction to Internal Control and Cash with a detailed analysis of internal control guide-
are directed to reflect on their learn- lines, banking activities, accounting for petty cash funds, and reconciling the differences between cash reported in
the bank account and cash in the company’s accounting records.
ing from previous chapters; provided
with a high-level summary of the cur- A Look at This Chapter
Chapter 8 takes a look at accounting for customer accounts receivable and short-term notes receivable, specifically
rent chapter; and introduced to the investigating tools such as initial recognition of the receivables and subsequent measurement at the end of the ac-
counting period. Valuation is assessed through methods to estimate bad debts, including the benefits of an A/R aging
concepts covered in the following report, and using the accounts receivable turnover ratio and days’ sales uncollected ratios to evaluate financial
statements.
chapter. These helpful learning sum-
A Look Ahead
maries help students focus on how Chapter 9, the first chapter of Volume 2, investigates accounting issues for fixed assets under the following major
categories: property, plant and equipment, and intangible assets. The chapter focuses on identifying all items that
their learning ties into big-picture are included in their asset cost and analyzes options for matching their usage costs over their useful lives. Other
considerations such as how to handle asset disposals, exchanges, and sales are analyzed.
objectives.
xiii
PREFACE
LEARNING OBJECTIVES
Learning Objectives have long been a standard in this textbook. By giving students a head start on what the
following material encompasses, the text readies them for the work ahead.
CHECKPOINT
CHECKPOINT
This series of questions within
5. What is the difference between private and public accountants?
the chapter reinforces the mate- 6. What are the four broad fields of accounting?
7. What is the purpose of an audit?
rial presented immediately be- 8. Distinguish between managerial and financial accounting.
9. What is the difference between external and internal users of accounting information?
fore it. These questions allow 10. Why are internal controls important?
students to “Do” problem mate- Do Quick Study question: QS 1-5
rial by referencing what they
have just learned. Answers at the Lar87271_ch04_230-307.indd
end of each chapter will4:57then
Page 256 12/10/15 PM f-479allow them to “Check” their work, further
supporting the Student Success Cycle. Under each set of Checkpoints is a reference to the Quick Study ques-
tions (single-topic exercises) available at the end of each chapter. Students can go ahead and try them at this
point. Checkpoint solutions are at the end of the chapter. Quick Study solutions are available on Connect.
NEW: IMPORTANT TIPS

Important tip boxes have been incorporated
Important Tip: Ensure you know the following rules as illustrated in Exhibit 2.7 before
reading Chapter 3. For a helpful learning tool, review the following video by Colin Dodds, an throughout the text to direct students’ attention
educational music video enthusiast.
Video Link: https://youtu.be/7EuxfW76BWU to critical concepts that students often miss in
their initial reading of the text.
DECISION INSIGHT
Social responsibility continues to be impor-
tant for students to learn early in their ac-
counting courses. Through the Decision DECISION INSIGHT
Loblaw’s Corporate Grocery Stores Go Perpetual
Insight feature, accounting’s role in ethics Loblaw Companies Limited, identifies its upgrade of its IT infrastructure as a positive move to en-
able the company to develop a more precise estimate through a “system-generated average
and social responsibility is described by cost.” The company estimates “the impact of this inventory measurement and other conversion
differences associated with implementation of a perpetual inventory system to be a $190 million
both reporting and assessing its impact. Re- decrease to the value of the inventory.”
lating theory to a real-life situation piques

interest and reinforces active learning.
DECISION MAKER Answer—End of chapter

DECISION MAKER
Inventory Manager—Ethical Dilemma This feature requires students to make accounting
You are the inventory manager for a trendy urban retail inventory merchandiser. Your compen-
sation includes a bonus plan based on the amount of gross profit reported in the financial state-
ments. Your supervisor comes to you and asks your opinion about changing the inventory costing
and business decisions by using role-playing to
method from moving weighted average to FIFO. Since costs have been rising and are expected to
continue to rise, your superior predicts the company will be more attractive to investors because
show the interaction of judgment and awareness,
of the reported higher profit using FIFO. You realize this proposed change will likely increase your
bonus as well. What do you recommend? as well as the impact of decisions made. Guidance
answers are available at the end of each chapter.
EXTEND YOUR KNOWLEDGE (EYK)

Supplementary material has been devel-
oped to explore some topics in more de- For further study on some topics of relevance to this chapter, please see the following Extend Your
Knowledge supplements:
tail than the textbook can allow. A list of EYK 4-1 Work Sheet Demonstration
EYK 4-2 Corporate Supplement
EYKs relevant to each chapter is pre- EYK 4-3 Summary of Business Activities
sented at the end of the chapter, alerting EYK 4-4 Examples of Classified Balance Sheets
students to visit Connect if they choose

to delve deeper into the material.
xiv
PREFACE
FINANCIAL STATEMENTS
Features and assignments that high-
light companies such as WestJet (a
company that provides services) and
Danier (a merchandiser) show ac-
counting in a modern and global con-
Executing on our strategies
text. Because students go directly to
WestJet Annual Report 2014 the financial statements of real com-
panies, they remain engaged in the ac-
tive learning process. The audited
ANNUAL REPORT 2014
annual financial statement section of
these annual reports (with notes to
! . . 5! , 2 % 0 / 24
& / 2 4 ( % 7 % % + 0 % 2 ) / $ % . $ % $ - ! 2# (
the financial statements), as well as
those of Indigo Books & Music, and
each Lar87271_ch02_076-149.indd Page 105 9/3/15 9:36 PM f-479
Telus (without the notes), are repro-

“We are what we

repeatedly do.
and duced at the end of Volume 1. In Vol-
ume 2, the annual audited financial
Excellence, then,
is not an act, every statements, excluding notes to the
financial statements, for WestJet,
but a habit.”
n !RISTOTLE day Danier, Indigo, and Telus are included.
2014 annual report
End-of-Chapter Material
Fundamental Accounting Principles sets the standard for quantity and quality of end-of-chapter material.
Summary
LO1 Explain the accounting cycle. The accounting Double-entry accounting means that every trans-
cycle includes the steps in preparing financial action affects at least two accounts. The total
SUMMARY statements for users that are repeated each re-
porting period.
amount debited must equal the total amount cred-
ited for each transaction. The system for record-
LO2 Describe an account, its use, and its relation- ing debits and credits follows from the accounting
Each chapter includes a Summary of the chapter ship to the ledger. An account is a detailed re- equation. The debit side is the normal balance for
assets, owner’s withdrawals, and expenses, and
cord of increases and decreases in a specific
by Learning Objective, to reinforce what students
Lar87271_ch02_076-149.indd Page 106 9/3/15 9:36 PM f-479
asset, liability, or equity item. Information is
taken from accounts, analyzed, summarized, and
the credit side is the normal balance for liabilities,
owner’s capital, and revenues.
presented in useful reports and financial state- LO4 Describe a chart of accounts and its relation-
have just learned. ments for users. ship to the ledger. A ledger is a record that con-
tains all accounts used by a company. This is what
LO3 Define debits and credits and explain their
role in double-entry accounting. Debit refers is referred to as the books. The chart of accounts is a
to left, and credit refers to right. The following listing of all accounts and usually includes an identi-
table summarizes debit and credit effects by ac- fication number that is assigned to each account.
count type: LO5 Analyze the impact of transactions on ac-
counts, record entries in a journal, and post
GUIDANCE ANSWERS TO DECISION MAKER

Guidance Answer to DECISION MAKER
Accounting Clerk
These discuss the Decision Maker boxes pre-
The business entity principle is being violated be-
cause it requires that the owner’s personal ex-
whole amount, liabilities will also be overstated.
At the end of the accounting period when the
sented earlier in the chapter, and reinforce the
penses be recorded separately from those of his amount of supplies used is recorded, Office Sup-
business. By debiting the entire amount to Office plies Expense will be overstated on the income need for decision making and critical thinking
Supplies, assets will be overstated on the balance statement, causing profit to be understated.
sheet. By crediting Accounts Payable for the When profit is too low, equity is also understated. skills. This feature fits into the Student Success
Cycle by reinforcing the “Apply” step.
xv
PREFACE
Guidance Answers to CHECKPOINT

GUIDANCE ANSWERS TO CHECKPOINT
1. Best Buy.
Merchandise Inventory ................... 2,000
The Checkpoint material throughout the chapter
2. Total cost is $12,180, calculated as: Cost of Goods Sold.................. 2,000
$11,400 + $130 + $150 + $100 + $400. $1,800 - $1,300 = $500/unit allows students to pause and check their prog-
original write-down; $500 × 4 =
3. The matching principle.
4. Businesses that sell unique, high dollar–
$2,000 maximum reversal
ress. This feature reinforces the “Do,” “Check,”
value merchandise in relatively low volume 7. The reported inventory amount is $540,
levels might choose specific identification. calculated as (20 × $5) + (40 × $8) + and “Apply” steps of the Student Success Cycle.
Car dealerships are a good example be- (10 × $12).
cause each car received as merchandise in- 8. Cost of goods sold is understated by
ventory is unique in terms of both features $10,000 in 2017 and overstated by
and identification number. Using specific $10,000 in 2018.
identification allows the business to accu-
9. The estimated ending inventory (at cost) is
rately tag each item coming in and going
$327,000 and is calculated as:
out.
Step 1: ($530,000 + $335,000) -
5. Moving weighted average gives a lower in-
$320,000 = $545,000
ventory figure on the balance sheet as com-
pared to FIFO. FIFO’s inventory amount will $324,000 + $195,000
Step 2: = 60%
approximate current replacement costs. $530,000 + $335,000
Moving weighted average costs increase but Step 3: $545,000 × 60% = $327,000
more slowly because of the effect of 10. Company B is more efficient at selling its in-
averaging. ventory because it has higher merchandise
6. Because these units are the same ones turnover.
that were originally written down, a reversal
is appropriate and would be recorded as:
Glossary
Consignee One who receives and holds goods owned Days’ sales in inventory A financial analysis tool used
by another party for the purpose of acting as an agent to estimate how many days it will take to convert the
GLOSSARY and selling the goods for the owner. The consignee
gets paid a fee from the consignor for finding a buyer.
inventory on hand into accounts receivable or cash;
calculated by dividing the ending inventory by cost
of goods sold and multiplying the result by 365.
All terms highlighted in the chapter are Consignor An owner of inventory goods who ships them
to another party who will then find a buyer and sell the Faithful representation The accounting principle that re-
Lar87271_ch02_076-149.indd Page 107 10/23/15 5:47 PM f-500 goods for the owner. The consignor retains title to the
/202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles quires information to be complete, neutral, unbiased,
included. goods while they are held offsite by the consignee. and free from error.
Consistency principle The accounting requirement that First-in, first-out (FIFO) The pricing of an inventory un-
a company use the same accounting policies period af- der the assumption that inventory items are sold in the
ter period so that the financial statements of succeed- order acquired; the first items received are the first
ing periods will be comparable. items sold.
DEMONSTRATION PROBLEM Problem Material

This Demonstration Problem is based on the same facts as the Demonstration Problem at the
end of Chapter 1 except for two additional items: (b) August 1 and (k) August 18. The fol- DEMONSTRATION PROBLEMS
lowing activities occurred during the first month of Joanne Cardinal’s new haircutting busi-
ness called The Cutlery: These problems reinforce the chapter material
a. On August 1, Cardinal put $16,000 cash into a chequing account in the name of The Cutlery.
She also invested $10,000 of equipment that she already owned. and further bolster the Student Success Cycle.
b. On August 1, Cardinal paid $2,400 for six months of insurance effective immediately.
c. On August 2, she paid $2,000 cash for furniture for the shop.
d. On August 3, she paid $3,200 cash to rent space in a strip mall for August.
e. On August 4, she furnished the shop by installing the old equipment and some new
Lar87271_ch02_076-149.indd
equipment that she bought on credit for $21,000. This amount is to be repaid in three equal Page 108 9/3/15 9:36 PM f-479 /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
payments at the end of August, September, and October.
ANALYSIS COMPONENT
An analysis component is included in each Mid- and End-
of-Chapter Demonstration Problem, as well as several Analysis Component:
Refer to The Cutlery’s August 31, 2017, financial statements. What do each of equity and
Exercises, Problems, and Focus on Financial Statements
liabilities represent?
questions. These promote critical thinking and give

students opportunities to practise their analytical skills.
Concept Review Questions CONCEPT REVIEW QUESTIONS

1. What tasks are performed with the work sheet? 9. Refer to Danier’s income statement in Appendix III
These short-answer questions reinforce the chap-
2. What two purposes are accomplished by recording at the end of the book. What journal entry was re-
closing entries? corded as of June 28, 2014, to close the revenue
account?
ter content by Learning Objective.
3. What are the four closing entries?
10. What is a company’s operating cycle? Lar87271_ch06_390-458.indd Page 430 10/8/15 4:35 PM user /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
4. Daniel is having trouble determining whether with-
drawals, the owner’s capital, interest income and 11. Why is a classified balance sheet more useful to fi-
prepaid insurance are temporary or permanent ac- nancial statement users than a non-classified bal-
counts. Explain to him the difference between a ance sheet?
temporary and a permanent account in accounting 12. What classes of assets and liabilities are shown on
and classify the accounts into each category. a typical classified balance sheet?
QUICK STUDY Quick Study

These single-topic exercises give students a QS 6-1 Inventory ownership LO1
quick test of each key element in the chapter and 1. At year-end Carefree Company has shipped, FOB destination, $500 of merchandise that is still in tran-
sit to Stark Company. Which company should include the $500 as part of inventory at year-end?
are referenced to Learning Objectives. Answers 2. Carefree Company has shipped goods to Stark and has an arrangement that Stark will sell the
goods for Carefree. Identify the consignor and the consignee. Which company should include any
to these items are available on Connect. unsold goods as part of inventory?
xvi
PREFACE
Exercise 6-3 Specific identification cost flow assumption LO2 EXERCISES

CHECK FIGURES: COGS = $9,427; Gross profit = $15,073
Refer to the data in Exercise 6-2. Assume that Urban Glam Cosmetics uses the specific identification
Exercises provide students with an additional
method to cost inventory. The 700 units were specifically sold as follows:
opportunity to reinforce basic chapter concepts
Jan. 10:
Mar. 15:
70
3
units from beginning inventory
units from beginning inventory, and
by Learning Objective. Note: Selected end-of-
177 units from the March 14 purchase
Oct. 5: 50 units from the March 14 purchase, and chapter exercises and problems are marked with
400 units from the July 30 purchase
this icon: . These have Excel templates

Calculate cost of goods sold and the gross profit.
located on Connect.
PROBLEMS Problems
Problems typically incorporate two or more Problem 1-1A Identifying type of business organization LO2
Complete the chart below by placing a checkmark in the appropriate column.
concepts. As well, there are two groups of Prob-
Type of Business Organization
lems: A Problems and Alternate or B Problems. Characteristic Sole Proprietorship Partnership Corporation
Limited liability
B Problems mirror the A Problems to help im- Unlimited liability
prove understanding through repetition. Owners are shareholders
Owners are partners
Taxed as a separate legal entity
Ethics Challenge ETHICS CHALLENGE

EC 5-1 Each chapter includes at least one Ethics
Claire Phelps is a popular high school student who attends approximately four dances a year at her high
school. Each dance requires a new dress and accessories that necessitate a financial outlay of $100 to
Challenge to reinforce critical thinking skills
$200 per event. Claire’s parents inform her that she is on her own with respect to financing the dresses.
After incurring a major hit to her savings for the first dance in her second year, Claire developed a differ- for students and open up discussion about
ent approach. She buys the dress on credit the week before the dance, wears it to the dance, and returns
the dress the next week to the store for a full refund on her charge card. Lar87271_ch02_076-149.indd Page 146
various ethical topics.
9/3/15 9:36 PM f-479 /202/MHR00276/Lar87271_disk1of1/1259087271/Lar87271_pagefiles
Required
1. Comment on the ethics exhibited by Claire and possible consequences of her actions.
2. How does the store account for the dresses that Claire returns?
FOCUS ON FINANCIAL STATEMENTS Focus on Financial Statements

Each chapter includes two technical and FFS 2-1
analytical questions that incorporate into Travis McAllister operates a surveying company. For the first few months of the company’s life (through
April), the accounting records were maintained by an outside bookkeeping service. According to those
the financial statements all major topics records, McAllister’s equity balance was $75,000 as of April 30. To save on expenses, McAllister decided
to keep the records himself. He managed to record May’s transactions properly, but was a bit rusty when
the time came to prepare the financial statements. His first versions of the balance sheet and income
covered up to that point. Additional ques- statement follow. McAllister is bothered that the company apparently operated at a loss during the
month, even though he was very busy.
tions are available online on Connect.
McAllister Surveying
Income Statement
For Month Ended May 31, 2017
Revenue:
Critical Thinking Mini Case Investments by owner ............................ $ 3,000
Unearned surveying fees ........................ 6,000
Prairie Insurance sells life insurance, disability insurance, vehicle insurance, crop insurance, and home- Total revenues .................................... $ 9,000
owners’ insurance. You are employed by Prairie Insurance and have been promoted to sales division
manager for the Western Canadian division. You will be supervising approximately 25 salespeople, along
with five administrative assistants at various locations. The salespeople travel extensively and submit
expense reports along with sales information monthly. A sample expense report for September shows:
CRITICAL THINKING MINI CASES

Prairie Insurance—Western Canadian Division
Sales Report: John Bishop
Month Ended September 30, 2017
These cases give students the opportunity to ap-
Sales revenue* .............................................
Expenses** ..................................................
$56,000
34,000
ply critical thinking skills to concepts learned in
*Sales invoices attached
**Receipts attached
the chapter, thus further reinforcing the “Apply”
step of the Student Success Cycle.
HELP ME SOLVE IT
New Help Me Solve It tutorials are available on Connect for Larson’s Fundamental Ac-
counting Principles. The tutorials guide students through one or two of the more chal- Help Me
lenging end-of-chapter problems per chapter, providing them with an engaging visual and SOLVE IT
audio walkthrough of the problem.
xvii
What’s New
The Accounting Standard
We listened! Through extensive reviewing and consultations with the market, we have heard the issues
and concerns instructors like you have about the materials you use to teach introductory financial ac-
counting. Here you will find a list of new changes to specific chapters that our author has made to
ensure the content of Fundamental Accounting Principles remains current and fresh. Whether you are
new to using Fundamental Accounting Principles or new to this edition, you can see that McGraw-Hill
Education and Larson/Jensen/Dieckmann are setting the accounting standard in Fundamental Ac-
counting Principles. We know you’ll like what you see.
General Updates engaging topics, and including inspiring sto-

ries from company startups to success stories
• Appendix III for Volume 1 includes the complete
of well-known businesses and not-for-profit or-
annual audited financial statements, including
ganizations. Additionally, Chapter 7’s vignette
notes to the financial statements, for WestJet and
features an analysis titled “What Is Cash?”
Danier Leather, as well as the audited financial
outlining the vast array of Canadian payment
statements without the notes for Indigo Books &
options available today. Nearly all of the
Music and Telus. Appendix II for Volume 2 in-
vignettes now include relevant video links for
cludes the annual audited financial statements,
students to broaden their real-world exposure
excluding notes to the financial statements, for
to critical business decisions.
WestJet, Danier Leather, Indigo, and Telus.
• Actual businesses used as examples through-
• Throughout Volumes 1 and 2, the exercises and
out Volumes 1 and 2 are bolded and highlighted
problems have been refreshed in terms of num-
in magenta at first mention to emphasize inte-
bers and/or business name/owner with a focus
gration of accounting concepts with actual
on providing relevant company examples to
business practice.
connect with today’s students. Company sce-
narios have been expanded and updated to • IFRS and ASPE differences are identified at
provide students with more information and the end of each chapter.
updated examples to enhance student engage- • Important tip boxes have been incorporated
ment. Volume 1 end-of-chapter content was re- throughout the text to direct students’ atten-
vised by Praise Ma of Kwantlen Polytechnic tion to critical concepts that students often
University, and Volume 2 by Laura Dallas, also miss in their initial reading of the text.
of Kwantlen Polytechnic University. • Many new exhibits have been added, including
• Various end-of-chapter exercises/problems several new learning summaries to assist stu-
have been adjusted to incorporate instructor dents in tying together chapter concepts.
and reviewer suggestions. Many existing exhibits have been refreshed as
• The chapter content is IFRS 2014 compliant appropriate with updated information.
throughout Volume I and IFRS 2015 compliant • Several new excerpts have been added to
throughout Volume 2; IFRS 2014/2015 refer- direct students’ attention to real-company
ences are included where appropriate. example disclosures in their most recent
• The 15th edition includes 14 exciting new published annual financial statement
chapter opening vignettes, featuring a range of reports.
xviii
PREFACE
• The number of actual business examples has CHAPTER 10 (FORMER CHAPTER 11)
increased based on review requests; these • New chapter opening vignette spotlighting
have been bolded and highlighted in magenta Pebble Technology Corp. and its efforts to
at first mention for emphasis. raise capital through Kickstarter fundraising
• New presentation displays all formulas campaigns. Vignette includes video links to
students need to pay attention to in purple further student engagement.
boxes. • Updated excerpt of Second Cup Ltd.’s balance
sheet, featuring presentation of current
liabilities.
Chapter-by-Chapter Updates • New presentation of Exhibit 10.6 featuring
Sales Tax Rates, effective January 1, 2016.
CHAPTER 9 (FORMER CHAPTER 10)
• New chapter opening vignette featuring • New Exhibit 10.8: GST-Exempt and Zero-Rated
Vancouver International Airport, includes a Products, including an explanation of zero-
Video Link spotlighting YVR’s state-of-the-art rated goods and GST-exempt products.
Airside Operations Building. • New section illustrating collection, payment,
• Updated critical thinking challenge on the and final remittance of HST.
Airside Operations Building at YVR. • New section outlining accounting for customer
• New engaging chapter preview to help stu- awards/loyalty programs and gift cards.
dents understand capital investments in PPE. • Terminology updated from long-term liabilities
• Updated Decision Maker to enhance student to non-current.
engagement. • Updated chapter Demonstration Problem,
• New example of obsolescence, to aid in enhancing student engagement.
student understanding.
• Updated presentation of accounting for ac- CHAPTER 11 (FORMER CHAPTER 12)
quired buildings versus constructed buildings • New chapter opening vignette featuring
to enhance student comprehension. Canadian-born start-up Kicking Horse Coffee
includes video links featuring an interview on
• Updated mid-chapter and end-of-chapter
entrepreneurship and expansion into the United
Demonstration Problems.
States and an inside look at Kicking Horse Coffee.
• Updated financial statement excerpts, featur-
• New Critical Thinking challenge.
ing presentation of Indigo Books & Music Inc.’s
accounting policy and depreciation schedule • Updated terminology from partnership
for property, plant, and equipment and Microsoft’s income/loss to partnership profit/loss.
presentation and disclosure over intangible • Updated Exhibit 11.10.
assets.
• Updated coverage of Patents and Copyrights CHAPTER 12 (FORMER CHAPTER 13)
to reflect current Canadian laws over intellec- • Updated chapter opening vignette features
tual property rights. new video link to Dragon’s Den episode and
• New example of acquisition: Shoppers Drug CBC interview.
Mart by Loblaw Companies, Ltd. is provided • New Decision Insight features Cara Operations
with example note disclosure to help students and its decision to go public.
understand accounting for goodwill. • New excerpt from Telus Corporation’s finan-
• New Exhibit 9.23: World’s Most Valuable cial statements illustrates disclosure of
brands. declared dividends.
xix
PREFACE
• New Financial Statement Analysis section for • New Important Tip box on calculating bond
ROE and book value per share to provide more interest expense.
real world application context for the chapter • New financial statement note excerpt from
content. WestJet.
CHAPTER 13 (FORMER CHAPTER 14) • Content covering leases, previously in the ap-
• New chapter opening vignette highlights the pendix, has been moved into the main chapter
history of Apple Inc. from its origins as a tech with expanded examples to help students un-
start-up to the recent 7:1 stock split, including derstand the accounting differences for the
a Video Link highlighting what investors lessee and lessor based on the terms of the
should know about the impact of the Apple lease agreement.
Inc. stock split. • Added Financial Statement Analysis section
• Expanded discussion of stock splits incorpo- for debt to equity Ratio, to provide more real-
rates an analysis of the impact of the Apple world application context for the chapter
Inc. stock split to shareholders, enhancing stu- content.
dent engagement by demonstrating the impact
through investigating the event. CHAPTER 15 (FORMER CHAPTER 16)
• New chapter opening vignette features
• New Financial Statement Analysis section in-
Saskatchewan craft brewery start-up Farmery;
cludes the dividend payout ratio, featuring the
it includes video links to CBC Dragon’s Den ep-
dividend payout ratio for Telus Corporation
isode and a CBC interview.
and providing more real-world context for
chapter content. • New Exhibits 15.1 and 15.2, financial statement
disclosure excerpts for PMC-Sierra and Indigo,
• Removed appendix covering treasury shares
providing context to students and aiding com-
• New table featuring several examples of clas-
prehension of chapter topics.
sifying changes to accounting estimates and
accounting policy changes. • New Exhibit 15.3 highlights an example stock
quote for Spin Master Corp.
CHAPTER 14 (FORMER CHAPTER 15) • Updated Accounting for Investments section
• New chapter opening vignette features two ex- based on IFRS 9.
amples of real bond issuance by ZooShare with
• New Decision Insight box spotlights Bernie
different risk profiles; it includes video link help-
Madoff and Ponzi Schemes (repurposed from
ing students to understand the business model of
chapter opening vignette in 14th edition).
ZooShare’s renewable energy cooperative.
• Updated Investments section based on new
• New example bond issuance for Telus Corpo-
IFRS 9, effective January 1, 2018. Terminology
ration to enhance real-world application of the
is updated to reflect new standards.
bond issuance procedures.
• New Exhibit 15.7, Accounting for Investments
• New Decision Insight covering the over-the-
Summary Chart, outlines the key issues of
counter trading options for the sale of or deter-
accounting for strategic and non-strategic
mination of market pricing for corporate
investments and corresponding journal entries
bonds in Canada.
and financial statement presentation.
• New example of a bond issuance by Telus
Corp., with the current trading information. CHAPTER 16 (FORMER CHAPTER 17)
• Updated chapter demonstration example to • New chapter opening vignette features Butter
illustrate the present value of a premium bond Avenue patisserie and includes Video Link for
to enhance student engagement. students to learn more about the company.
xx
PREFACE
• New Decision Insight on top 10 cash flow man- student interest and demonstrate real world
agement tips for small businesses. applicability.
• Coverage of direct method of cash flow state- • New introductory section focussing on the
ments moved from appendix into main chapter basics of analysis encourages students to per-
with an emphasis on the key differences and form a more holistic approach to their analysis
similarities between the direct and indirect and provides a brief overview of tools such as
methods highlighted through Important Tip PESTLE, SWOT, and Porter’s Five Forces.
boxes to aid student comprehension. • New terminology: acid-test ratio is referred to
• New financial statement excerpt provides an as the quick ratio.
example cash flow statement for Brick • Formulas requiring memorization are high-
Brewing Company Ltd. to help students under- lighted in purple boxes and key rules of thumb
stand the real-world application of the material. and commentary on favourable versus unfa-
• New summary chart (Exhibit 16.14) provides vourable results have been added to help stu-
key information to students on preparing a dents in interpreting their results.
cash flow statement and highlighting key dif-
ferences between direct and indirect methods APPENDIX I
of statement of cash flow. • All rates (i.e., EI, CPP, Provincial Tax, Federal
Tax) are updated to 2015.
• Mid-Chapter Demonstration Problem and Dem-
onstration Problem now feature both direct APPENDIX II
and indirect methods.
• Includes annual audited financial statements
CHAPTER 17 (FORMER CHAPTER 18) (excluding notes to the financial statements)
• New chapter opening vignette features Lulule- for WestJet, Danier Leather, Telus Corporation,
mon Athletica Inc. and analyzes its growth and Indigo Books & Music. (See Volume 1 for
from inception to a $1.8 billion company, pro- WestJet and Danier audited financial state-
viding analysis of its profit and gross margins ments with notes.)
and analyzing its key success factors.
APPENDIX III
• Financial statement analysis is illustrated with • Sample chart of accounts updated to reflect
a more detailed and engaging example, in- textbook content.
cluding heightened company detail to capture
xxi
PREFACE
Market Leading Technology
Learn without Limits

McGraw-Hill Connect® is an award-winning digital teaching and learning platform that gives students
the means to better connect with their coursework, with their instructors, and with the important con-
cepts that they will need to know for success now and in the future. With Connect, instructors can take
advantage of McGraw-Hill’s trusted content to seamlessly deliver assignments, quizzes, and tests online.
McGraw-Hill Connect is the only learning platform that continually adapts to each student, delivering
precisely what they need, when they need it, so class time is more engaging and effective. Connect makes
teaching and learning personal, easy, and proven.
Connect Key Features:

SMARTBOOK®
As the first and only adaptive reading experience, SmartBook is changing the way students read and
learn. SmartBook creates a personalized reading experience by highlighting the most important con-
cepts a student needs to learn at that moment in time. As a student engages with SmartBook, the reading
experience continuously adapts by highlighting content based on what each student knows and doesn’t
know. This ensures that he or she is focused on the content needed to close specific knowledge gaps,
while it simultaneously promotes long-term learning.
CONNECT INSIGHT®
Connect Insight is Connect’s new one-of-a-kind visual analytics dashboard—now available for instructors—
that provides at-a-glance information regarding student performance, which is immediately actionable. By
presenting assignment, assessment, and topical performance results together with a time metric that is easily
visible for aggregate or individual results, Connect Insight gives the instructor the ability to take a just-in-time
approach to teaching and learning, which was never before available. Connect Insight presents data that and
helps instructors improve class performance in a way that is efficient and effective.
SIMPLE ASSIGNMENT MANAGEMENT

With Connect, creating assignments is easier than ever, so instructors can spend more time teaching and
less time managing.
• Assign SmartBook learning modules
• Instructors can edit existing questions and create their own questions
• Draw from a variety of text-specific questions, resources, and test bank material to assign online
• Streamline lesson planning, student progress reporting, and assignment grading to make classroom
management more efficient than ever
SMART GRADING
When it comes to studying, time is precious. Connect helps students learn more efficiently by providing
feedback and practice material when they need it, where they need it.
• Automatically score assignments, providing students immediate feedback on their work and compar-
isons with correct answers
• Access and review each response, manually change grades, or leave comments for students to review
xxii
PREFACE
• Track individual student performance—by question or assignment, or in relation to the class overall—
with detailed grade reports.
• Reinforce classroom concepts with practice tests and instant quizzes.
• Integrate grade reports easily with Learning Management Systems including Blackboard, D2L, and
Moodle.
INSTRUCTOR LIBRARY
The Connect Instructor Library is a repository for additional resources to improve student engagement in and
out of the class. It provides all the critical resources instructors need to build their course. Instructors can
• Access Instructor resources
• View assignments and resources created for past sections
• Post their own resources for students to use
Instructor Resources
Instructor supplements are available within Connect.
SOLUTIONS MANUAL
Fundamental Accounting Principles continues to set the standard for accuracy of its problem material.
The Solutions Manual has been revised by Praise Ma, Kwantlen Polytechnic University (Volume 1) and
Laura Dallas, Kwantlen Polytechnic University (Volume 2). Additional accuracy checking was provided
by Rhonda Heninger, SAIT Polytechnic, Elizabeth Hicks, Douglas College, and Michelle Young, CPA.
Available in both Microsoft Word and PDF format, solutions for all problem material are included.
COMPUTERIZED TEST BANK

The test bank has been revised and technically checked for accuracy to reflect the changes in the Fifteenth
Canadian Edition. Carol Tristani, Mohawk College, revised the test bank for this edition. Grouped accord-
ing to Learning Objective, difficulty level, and by level of Bloom’s Taxonomy, the questions in the comput-
erized test bank include true/false, multiple choice, matching, short essay, and problem material.
POWERPOINT® PRESENTATIONS
These presentation slides, revised by Betty Young, Red River College, are fully integrated with the text to
visually present chapter concepts.
INSTRUCTOR’S MANUAL
The Instructor’s Manual, revised by Denise Cook, Durham College (Volume 1) and Joe Pidutti, Durham
College (Volume 2), cross-references assignment materials by Learning Objective and also provides a
convenient chapter outline.
FOCUS ON FINANCIAL STATEMENTS

These include technical and analytical questions that incorporate major topics covered. These, and ac-
companying solutions in the Solutions Manual, have been revised by Stephanie Ibach, MacEwan Univer-
sity. Two additional Focus on Financial Statement exercises for each chapter are included on Connect.
EXTEND YOUR KNOWLEDGE

This supplemental material has been developed to delve into more detail for specific topics. These have
been revised by Stephanie Ibach, MacEwan University.
xxiii
PREFACE
EXCEL TEMPLATE SOLUTIONS

Solutions to the problems using Excel templates are available for instructors. These have been revised by
Ian Feltmate, Acadia University.
IMAGE BANK
All exhibits and tables displayed in the text are available for your use, whether for creating transparen-
cies or handouts, or customizing your own PowerPoint presentations.
Other Supplements for Students

WORKING PAPERS
Available for purchase by students, printed Working Papers for Volumes 1 and 2 match the end-of-chapter
material. They include papers that can be used to solve all of the Quick Study questions, Exercises, and A
and B Problem sets. The Working Papers for the Fifteenth Canadian Edition have been revised by Praise
Ma, Kwantlen Polytechnic University (Volume 1) and Laura Dallas, Kwantlen Polytechnic University
(Volume 2). Additional technical checking was completed by Michelle Young.
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The success of this text is the result of an exhaustive process, which has gone beyond the scope of a single
edition. Hundreds of instructors and educators across the country have been involved in giving their feedback
to help develop the most successful accounting fundamentals text in the country. We owe thanks to all of
those who took the time to evaluate this textbook and its supplemental products.
Fifteenth Canadian Edition Reviewers

Joan Baines Red River College Rod Delcourt Algonquin College
Les Barnhouse Grant MacEwan University Kevin deWolde University of the Fraser Valley
Maria Belanger Algonquin College Han Donker University of Northern British
Robert Briggs New Brunswick Community Columbia
College David Fleming George Brown College
Lewis Callahan Lethbridge College Brent Groen University of Fraser Valley
Barb Chapple St. Clair College Kerry Hendricks Fanshawe College
Shiraz Charania Langara College Rhonda Heninger Southern Alberta Institute of
Denise Cook Durham College Technology
Derek Cook Okanagan College Elizabeth Hicks Douglas College
Heather Cornish Northern Alberta Institute of Darcie Hillebrand Capilano University
Technology Gwen Hoyseth Grande Prairie Regional College
xxiv
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the cause of such an interference. Conciliation should then be
offered by having at hand a little, sweetened water, which may be
sprinkled, or rather let drop, from a feather or a brush. The sudden
motion of the hand required in the act of sprinkling irritates the bees,
so that, instead of making them our friends, they may become our
foes. Mr. Langstroth recommends that a fine watering-pot, filled with
sweetened water, be used for the purpose. Care must be taken not
to drench the bees; only just sufficient should be given to run down
the sides of the combs, as well as sprinkling the top. As soon as the
bees really understand that syrup is being given them, they feast
upon it, instead of angrily attacking the operator. Thus pacified, and
with gentle treatment, but little difficulty will be found in proceeding
with the work required. But the unskilled operator should on no
account neglect to put on a bee-dress and gloves, as described
above. We would err on the side of caution, although there is an old
saying that "a cat in gloves catches no mice;" and the apiarian will
find that his fingers are not so free to work as he would like, for
gloves, make them rather clumsy in drawing up the frames.
The frames must now be gently prised from front to rear; this may
be done with a small screw-driver or other stout instrument with a
wedged end to go into the notches. The frames fit loosely so as to
allow of a little movement from back to front; a lateral or side-way
movement might kill the queen, or, if not so fatal as that, might crush
some of the bees and injure the brood combs, which must be
carefully avoided. Of course, much depends upon the nature of the
operation that has to be performed, whether or no all the frames
should be thus loosened. If it be for making artificial swarms, or for
any purpose requiring an interview with her majesty, the whole of
them must be loosened, because it often happens that all the combs
have to be examined, sometimes twice over, before she can be
discovered. Bees are very apt to build their combs in a slightly
waving form, and in extracting one it will be needful to make room
both for the comb and bees upon it to pass without scraping the next
comb, and there will be a difficulty if the apiarian attempts to draw
out one comb whilst the other frames are located in their appropriate
notches. Let the operator gently proceed to lift, say, the third frame
(allowing it to lodge on the little block that divides the notches)
slightly nearer to the fourth frame, and the second nearer the third,
so as to admit of sufficient space to lift out the end one. Very
carefully and slowly he should lift the frame by taking hold, with
thumb and finger, of the projecting shoulders that rest in the notch;
and he must not let it touch or scrape the next frame or the sides of
the hive, so as to crush or irritate any bees.
After the end comb is thus removed, it will be easy to extract the
others, as there will now be plenty of room for drawing them out. A
hive of exactly the same size should be at hand; and in case it be
desired to remove the combs and bees into another hive, care
should be taken that each comb occupies the same relative position
that it did in the old hive.
In handling the frames, it should be borne in mind that they are to
be held perpendicularly. To gain a view of both sides of the comb
when searching for the queen, or for any purpose requiring full
inspection, with a little dexterity in twirling the frame round, the
reverse side may be brought to face the operator, without letting the
comb break away by its own weight, and so fall out of the frame,
which it will do if allowed to deviate from its upright or downright
position. If the operator could see an experienced person perform
the operation, he would quickly understand how combs may thus be
handled without any risk of a smash.
When placing frames in the hive, care must be taken not to crush
a bee between the projecting shoulders of the frame and the rabbets
or notches on which they rest, and on no account must the frame be
let down with a jerk, or the bees will become exceedingly fierce: the
frame should be so slowly deposited in its place that a bee on feeling
the slightest pressure may have the opportunity of escaping unhurt
thereby. The crown-board should be replaced by first resting its front
edge in its place, and then slowly lowering the after part, looking
carefully under, and momentarily raising it when necessary to avoid
crushing a bee. Should the hive have its super on, the same
directions may be followed. The super with its honey-board may be
bodily taken away, and so placed and confined for a time that
robber-bees cannot find an entrance, and also be far enough from
the apiarian to be out of danger of being broken or overturned by
him.
ADVANTAGES OF BAR AND FRAME HIVES.

It will be asked, Why all this trouble about bar and frames with
straight combs built upon them? We have shown the full command
which the bee-keeper has over a hive so constituted, and we now
proceed to show how, in skilful hands, these advantages may be
used successfully; though; in the hands of the unpractised and
unskilful, the contrary may be the result.
All the bars and frames in an apiary ought to be of precisely the
same dimensions, so as to fit every hive. This is essential for the
strengthening of weak hives. A hive that is weakly may often be
advantageously strengthened by having put into it a comb of brood
from a populous stock, to which an empty frame from the weak one
may be given; no bees must be on the brood-comb—these should
be shaken off or gently dislodged with a feather into the hive from
which the comb is taken. The frames of combs should then be, one
by one, placed so as to fill' in the vacancy, leaving the empty frame
nearest the side. When a hive has been in use many years, the
combs become very black, and every bee that is bred in a cell leaves
a film behind. It may be understood how in this way the cells become
contracted, and the bees that are bred in them correspondingly
reduced in size. After the lapse of at least, say, five years, it may be
necessary to begin removing the old combs. This may be done by
cutting away the comb, or by substituting; an empty frame for one
with old black comb, gradually moving the frames towards each
other. By taking two away in this manner in the spring or summer of
every season, the combs in course of five years may all be
reconstructed, and fresh clean ones be secured for breeding in,
instead of the old black ones that otherwise would remain as long as
the stock could live in the hive.
ARTIFICIAL SWARMING.
Every bee-keeper knows the anxiety he feels in watching and
expecting a swarm to come forth, fearful lest his favourites should,
"like riches, take wing and fly away,"—a mischance that it is
desirable to prevent. In our description of natural swarming, this will
be found fully treated of; we propose here merely to point out how,
with the movable frames, this work of Nature may be assisted—we
say assisted, because artificial swarming should, as nearly as
possible, resemble natural swarming; that is, it should be performed
at the same time of the year, and when the populous state of the
hive makes a division desirable. This is easily known to be the case
when bees hang out in clusters at the entrance, wasting their time in
enforced idleness instead of being abroad gathering honey. It is also
necessary that the hive contain drones.
When such, is, the state of the hive, the facility of affording an
artificial swarm with a movable frame-hive is a decided advantage.
The best time for performing the operation is about ten o'clock in the
morning of a fine summer's day. The following directions should be
carried out:—Place ready a counter or bench that is firm and strong,
and which has space on it for the inhabited—or, rather, the over-
inhabited—frame-hive and the empty one, which is about to be made
the receptacle of a separate stock. The operator, attired in his bee-
dress, and having the other appliances ready, may now open the
hive[17] as before described, and proceed to take out the frames,
carefully examining both sides of each comb to find the queen;[18]
she is generally in the centre of the hive, so that it is not always
needful to take out all the ten frames. As they are examined, the
frames may be put into the empty hive, and when the object of the
bee-master's search is found, he must carefully remove the frame
containing her majesty, and may place it temporarily in the empty
hive, at one end by itself. Next he must proceed to put the frames
back into the old hive, closing up the vacancy caused by the removal
of the comb with the queen on it, and leave the empty frame at the
end. Then he may place the frame containing the queen, with the
few bees that maybe upon it, in the centre of the empty hive; and,
finally, putting all the other frames in, and replacing the lid, the bee-
master will place this hive in the exact position occupied by the old
stock. The bees that are on the wing will go to the old spot, and,
finding the queen there, they will rally round her, and very soon form
a sufficient number to constitute a swarm; comb-building will at once
begin, the frames will, in a week or so, be filled, and a satisfactory
stock will thus be established. By doing this, at the right time, just
before the bees are about to swarm, or when there are many drones,
all the trouble of watching and waiting for them is saved. Mr.
Woodbury claims the honour of having originated this mode of
swarming.
[17] Bees are apt to take the interference more kindly if the
stock be moved a little distance from its accustomed stand; in
such case, place an empty hive in its place, to amuse returning
bees. These can be shaken out when the hive it is desired they
should inhabit is restored. If the hive be kept in a closed bee-
house, the entrance should be shut down until the hive is
replaced, when the clustered bees may be at once admitted.
[18] Italian queens are more easily detected, being of a
brighter colour and, generally, larger than English queens.
This operation we performed, exactly as described above, with
one of our improved cottage-hives, one afternoon at the latter end of
May, 1862. Whilst inspecting our bees, we caught sight of the queen
on the comb in one of the bell-glasses. This was a chance not to be
missed, and we immediately resolved to form an artificial swarm, for
the hive was very full of bees. Besides, being obliged to be away
from the apiary most of the week, we were glad of the opportunity of
so easily establishing a colony without the uncertainty and trouble of
hiving a natural swarm. In the first place, we slid a tin under the bell-
glass, and removing the stock-hive from underneath, we took it a few
feet away; then we placed an empty improved cottage-hive where
the old stock had stood, and put the glass of comb containing the
queen and a few bees over one of the holes in the crown of this new
empty hive. The bees that were left abroad belonging to the old
stock returned as usual to their old entrance as they supposed; soon
a sufficient number formed a large cluster in the hive and began
comb-building, the queen remaining in the glass until the cells below
were sufficiently numerous for her to deposit her eggs in them. The
division answered exceedingly well; both hives prospered: the old
hive either had some princesses coming forward to supply the loss
of the queen, or the bees used a power that they possess of raising
a queen from worker-brood in the manner we have previously
described.[19]
[19] See Section I, page 9.
The foregoing account illustrates the successful formation of an
artificial swarm; but, with a cottage-hive, gaining possession of the
queen is quite a matter of chance. With a movable frame-hive she
can at any suitable time be found.
Precisely the same plan is to be adopted with the old stock in the
frame-hive as we have described in the case of the cottage-hive, that
is, to remove it some few paces off: when the hives are in a bee-
house, a similar result may be obtained, by placing the new swarm
for a day or two to the entrance used by the bees when with the old
stock, and the old stock may be removed to an approximate
entrance. Some apiarians recommend that a space be left between
the two hives, by placing the hives on the right and left of the old
entrance, in order that too large a proportion of bees should not
enter the new hive at the old position, to the impoverishment of the
other. But we have found the mode adopted with the cottage-hive
answer so well, that we see no reason for recommending any
different plan.
It is the office of the bee-master to assist, not in the least degree
to oppose, nature. We know that when a natural swarm issues forth,
it has its impregnated queen, and, when located in a new abode, it
commences building worker-combs, leaving the building of the few
drone-combs to a later period; but if a division of the hive should be
made, by putting half the combs in one hive and half in another, the
hive that is either queenless or contains an embryo queen will busy
itself with building only drone-comb; thus a number of receptacles for
useless bees is provided, which tends to weakness, and eventually
to loss of the hive.
In the plan we have recommended for forming two separate
families, we nearly follow the natural state of things; the comb that
the queen is upon is the only one that is taken from the hive, and this
vacancy should be filled in by moving the frames together, so as to
leave the empty frame at the end. The bees, under the government
of the impregnated queen, construct the combs and furnish their new
above, as before stated, with worker-cells.
By adopting the plan above described, the movable bar and
frame-hive will prove far superior to any of the dividing hives, which
provide for equal division of the combs.[20]
[20] At page 143 of Mr. Langstroth's "Honey Bee," other
methods of artificial swarming are described, the perusal of which
will well repay the scientific bee-keeper.
Perhaps the greatest advantage the movable frame-hive
possesses is, that a full knowledge can be attained of its exact state
as regards the queen, the population, and the quantity of food in
stock. During weather of a genial temperature, the combs may on
any fine day be inspected, and thus, a knowledge being gained of
the deficiency existing in a hive, the necessary means may be
adopted for supplying the want. Sometimes such an examination will
verify the fears of the bee-keeper, when, having observed that his
bees have ceased to carry in pollen, he has thereby received
warning that the queen has been lost at some juncture when no
successor to the throne could be provided. Such a hive has entered
on a downward course, and will dwindle away entirely, unless a
queen should be given to it, or else some combs containing young
brood not more than three days old. By the latter method, the bee-
keeper will gain an opportunity of seeing the bees set about their
wonderful process of raising a queen from the brood thus provided
for them.
When a bee-keeper has become skilful in his calling, he maybe
desirous to encourage the breeding of queens, or rather of
preventing their destruction. He will seek to use the propagating
instincts of the worker-bees as a set-off against that innate hatred of
rivalry which prompts the reigning queen to kill the tender royal
brood.
An ingenious little contrivance has been brought into use by
continental bee-keepers, especially by Herr Kleine, a German pastor,
to prevent the destruction alluded to. It consists of a small wire cage
(in fact, a pipe cover), as represented in the above engraving, placed
over a queen-cell to protect it from the mother-bee's animosity, and it
also serves to prevent the young queen, when hatched, from
escaping; for she will have the same jealous feeling toward her
sister-princesses, should there be more in the hive. The bee-master
may thus carefully remove and appropriate her.
Particular attention will have to be exercised to affix the cage into
the comb by pressure, as far as the middle wall, but at no point must
it touch the royal cell itself. As the cage will probably project so as to
touch the adjoining comb, a little incision and removal of a portion
may be necessary, to allow space for it. It can, however, be
squeezed into any shape to suit the position required.
This covering need not be put over the cell until the egg is a little
more than a week old. The animosity of the reigning queen does not
generally manifest itself until the royal brood approaches maturity.
It is said that these cells are unmolested on the tenth day, but
that on the eleventh day they may be found tenantless.
Notwithstanding the apiarian's care and skill, many disappointments
are frequently experienced in endeavouring to establishing fertile
young queens at the head of colonies.
Hives found to be queenless may be supplied either with matured
queens or with queen-cells. If the latter are sufficiently numerous,
their introduction may easily be effected by exchanging a comb in
each hive; if they have to be cut out and place loosely in the new
hive, a triangular piece of comb should then be removed with them,
to be used as a block in preventing any pressure coming on them. A
space must be cut out of the middle in the centre combs of the hive
into which they are to be introduced. Special care must be taken not
to bruise the royal embryos, as they are particularly sensitive to
pressure. It is sometimes best to introduce royal brood into
queenless hives in preference to matured unimpregnated queens,
because, as mentioned at page 8, bees are reluctant to receive
virgin queens, whilst they will tolerate one hatched in the hive, who
will speedily depart to seek a drone. Bee-masters mostly use small
hives for queen-rearing, consisting of, say, four combs. By extracting
from a populous hive four such frames of combs (with the bees on
them), and having eggs in the first stage (see page 9), or better still a
royal embryo, the bees will rear a queen or queens therefrom. Care
will have to be exercised to ensure that there is a sufficient number
of bees to mature the brood brought from the hive.[21]
[21] These weak little colonies should have small entrances,
so as to be better able to defend themselves from the attacks of
robber-bees, and they will require to be assisted and
strengthened by feeding.
A colony of this character is technically called a "nucleus."
Such operations as queen-rearing should only be attempted in
warm summer weather, and when drones are abundant.
A very great advantage that the Woodbury bar and frame hive
affords, is the safety and convenience with which a stock of bees
can in it be transported to any part of the kingdom: by a few
additional arrangements, stocks have even been sent in it to distant
countries. In many districts hives are removed to moors, and heaths
in autumn, for the purpose of gathering heather honey. In this
operation, the frames are a great support to the combs, very much
lessening the risk of a break down and consequent loss.
From a hive that has been inhabited all the winter, we have not
unfrequently lifted out the frames and removed the stock to a clean
hive; and we believe that the change has always been useful The
bees find a clean floor-board and a clean hive to breed in, free from
insects that may have harboured in crevices about their former
abode. When the change has been made, the old hive can be
thoroughly cleaned and used in the same way for making the
exchange with another stock. The process for handling will, of
course, be the same as before described. We have found that,
where this plan has been carried out, the bees seem to progress
faster. Perhaps a little stirring up may be useful in arousing them
from their winter doze. The time we recommend for doing this is in
the beginning of April, but a fine warm day should be chosen.
DRIVING.
Driving is an operation by which bees are induced to vacate an
old settled hive and to enter an empty one. Many apiarians prefer
this mode of effecting an exchange of hives to the plan of fumigating
the bees.
The greatest success attending such a transfer will be in the case
of hives well filled with combs that are worked nearly to the floor-
board; and it may be remarked, that bees are generally so far
provident, that they leave an open space in which to pass
underneath their combs over all the floor of the hive. When the old
hive is inverted, the bees crawl up the combs, and thus more easily
pass up into the new hive, which the operator places over the old
one, with the intent that they should enter it.
The best time for performing this operation is about the middle of
the day, and when the weather is warm. It is essential that the
operator be protected with a bee-dress and gloves, as before
described; and previous to commencing his task, he must provide all
necessary implements. These are:—a couple of hives, one of which
should correspond in shape and size with the hive from which the
bees are to be driven; a cloth to tie round at the junction when the
new hive is placed on the old one; some string to keep the cloth in its
place; an empty pail to receive the top of the old hive, if one of the
old conical shape, but if the stock of bees is in a square box-hive
with a flat top, a firm stool will be the best; and a tube fumigator with
some fungus, which will complete the material of war. The bucket or
stool must be placed securely on the ground, about a yard from the
place where the full hive stands; then a few puffs of smoke, blown in
amongst the bees, will cause them to retreat up amongst the combs.
The bee-master must now turn the hive[22] upside down very gently;
letting it rest in the pail or on the stool; he then quickly places the
empty hive over the full one, and ties the cloth round it, to prevent
any escape of the bees. If the cloth be damped, it will cling the closer
to the hives. The third hive is intended to be placed on the stand
formerly occupied by the stock, so as to retain the few returning bees
which had been absent in the fields. Care must be taken that all
crevices through which it is possible for the bees to escape from the
united hives should be effectually closed. When the two are fairly
united, the operator will proceed by rapping the full hive gently with
the hands or a couple of sticks, more particularly on that side where
the combs are the most thickly placed—that is, if the hive be not
equally filled. A stock is in the best condition for driving twenty-one
days, or thereabouts, after a first swarm has issued; the brood will
then have hatched out, the bees will quit more readily, and there will
be no loss of larvæ in the cells.
[22] Care should be exercised in turning the hives over to keep
the combs vertical, or they are likely to break from their
foundations.
It generally happens that, in about fifteen minutes, the bees
regularly commence the ascent; their exodus will be known by the
distinct rushing sound which is always noticed when a colony of
bees is on the move. The first thing bees do when disturbed is to fill
their honey-bags, as they invariably do at swarming time;
consequently, after the first rush into the new hive is over, as in the
case of a swarm, the "flitting" bees are not much disposed to take
wing. When the noise made by the ascending bees has been heard,
and has in a great degree subsided, the cloth may be removed, and
the old hive, now deserted, may be taken indoors; and if a few bees
yet remain, they may be brushed off with a feather. An experienced
apiarian, on first hearing the rushing noise before mentioned, will not
hesitate to tilt the top hive over a little on one side, so that he may
watch the bees during the ascent; the queen may be seen passing
up, and if the operator desires to take her away, he can secure her
by placing a wine-glass over her. This expedient is often resorted to
in the autumn, when stocks are to be united, for in such a case the
removal of the queen prevents some fighting.
If the taking of the honey be the object of the bee-master, then
"driving" is manifestly a better plan than resorting to the fumes of
sulphur for the purpose; for the bees from whom the store is taken
can be joined to stocks that are weak in numbers, with considerable
advantage to the future prosperity of the apiary.
When the removed bees are to be joined to another stock, the
operator will proceed as follows:—At dusk, dislodge the bees on to a
cloth, sprinkle them with sweet syrup, and place the hive to which it
is intended to join them over the mass; they will gradually ascend
into the hive placed for them, and early next morning the hive, with
its slender stock thus augmented, may be removed to its stand.
Should the operator not have been successful, or not sufficiently
skilful to gain possession of the queen, he may leave it to the bees
themselves to decide which queen they will have.
By this plan of "driving," artificial swarms may be secured by an
"expert" even in common hives, though those do not afford the
facilities for such a purpose as do the bar or bar-and-frame hives.
CHANGING OLD STOCKS TO NEW HIVES.

We frequently find that the possessor of a stock of bees in a
cottager's common straw hive is desirous of removing the whole
stock of bees and comb into one of our improved hives, in which the
honey may be obtained without the destruction of the bees. We
mostly discourage such a transfer, attended as it is with much labour,
and requiring a considerable amount of apiarian skill. An old-
fashioned hive may very readily be rendered a humane one, simply
by cutting out with a sharp-pointed knife the middle of the top of the
hive; a piece may thus easily be taken out, so as to leave a round
hole two or three inches in diameter, but care must be taken that the
knife does not penetrate much below the straw, lest it reach the
comb or the bees—and it will be safer for the operator to have a bee-
dress on. There should be ready a round adapting-board, with a
corresponding hole, which may be secured on the top by putting four
long nails through the same number of holes in the board; then a
cap-hive or a glass may be placed on the top, for the purpose of
admitting the bees, who will soon crowd therein to work.
This hive or glass will form a super or depriving-hive, and can be
worked as profitably as most of the improved hives. For the sake of
an improved appearance, an outside case, either of zinc, straw, or
wood, may be dropped over all, and then, if well painted, the whole
will form no disfigurement to any flower-garden.
This is, beyond doubt, the easiest way of overcoming the
difficulty, but as it may not satisfy all, we now proceed to describe
how a complete transfer may be made. No hive offers such facilities
for the correct placing of the combs in a perfectly upright position as
does the bar-and-frame hive. As before remarked, we should be
slow to recommend any one to attempt the operation who is not
already pretty well accustomed to the handling of bees and
acquainted with their habits; but by carefully carrying out the
following directions any one may successfully perform the feat. The
first thing is to get the bees away from the combs: there are two
ways of doing this,—one is by fumigation (see page 145), the other
by driving (see page 179). Whichever plan may be resorted to, have
the bees confined in the old hive on their stand until you are quite
ready to admit them into the bar-and-frame hive. Have in readiness
all the necessary appliances. These consist of a large knife for
cutting the hive, a good-sized table on which to lay the brood-combs,
a basin of water—for washing off honey which may besmear the
hands,—tape or cotton string to fasten the combs in their frames, a
pair of honey-cutters for cutting out the combs, jars to hold the honey
that runs out, and a feather for brushing off any bees that may
remain. It is necessary that the operator should have on his bee-
dress and india-rubber gloves. Then begin by slicing off a piece of
the hive with a sharp table-knife; carefully cut out the working combs
—cut them large, so that they will squeeze into the frames; and, to
be more secure, wind some of the tape round to keep them in
position until made fast by the bees. After a few days, these
fastenings may be removed. Care should be taken that the combs
occupy, the same position in the frames as in the hive from which
they were extracted. Having thus prepared the hive, the bees may
be let into it, in the manner Mr. Woodbury recommends for a swarm
(see page 159). It may be as well to keep them confined a few
hours, giving them water at the top, until they make the combs
secure; the new hive will then be less likely to offer an attraction to
bees from other hives, who, if feloniously inclined, might come to
rob. This transfer should be made when the weather is such that the
bees can fly about: when not warm enough, it should be done in a
room at a temperature of about 70 degrees. An expert apiarian could
perform the operation in less than three quarters of an hour, and with
little loss. A week or so after a swarm has left the old stock is
perhaps the very best time for such a removal. Should the operation
be performed in the open air, the bees from surrounding hives will be
sure to come in great numbers to obtain a share of the honey
necessarily exposed, for they delight in plunder. In order, therefore,
to avoid annoyance to the operator, and the excitement which is
certain to be induced in surrounding hives, it is better to conduct the
dissection in some building with closed doors. In some instances a
routing of this kind has a beneficial effect; old stocks of hives that
have previously appeared to be dwindling are often aroused to
activity by their removal into a fresh domicile.
WEIGHING HIVES, &c.

One of the most effectual modes of ascertaining the condition of
a hive is by weighing it. Such knowledge is most important at the
close of the gathering season, in order that the bee-keeper may
determine whether he ought to give his bees artificial food to enable
them to live through the dreary winter. A knowledge of the numerical
strength of the colony is also useful, in enabling the bee-keeper to
decide which hives will be benefited by being joined together, on the
plan explained in the articles on "Fumigation" and "Driving."
A hive can very easily be weighed, if a Salter's Spring Balance be

suspended near the apiary. The hive, having a strap or cord passed
under and over it, crossing at right angles on the top, may be hooked
on to the balance, so that the weight will be indicated on the dial.
The annexed engraving represents a tripod stand, with a
weighing-machine of the above-named construction, to which a hive
with a super is attached. Such an arrangement will be found
convenient for those bee-keepers who may not possess suitable
sheds in their gardens, where a hive could be thus suspended from
a beam.
This contrivance is both portable and simple, and can be used
from time to time; or, if the apiarian desires to have the hive
constantly suspended, a water-proof covering might easily be made
to drop over, and adapted so as to admit of being raised occasionally
for ascertaining the weight shown on the dial.
To prevent the hive being swayed to and fro by the wind, three
cords (gear ropes) might be attached therefrom to the three legs of
the stand. The height of such a stand need not exceed four feet.
Much interest might be derived by watching the daily or hourly
increasing store brought into a hive during the gathering season.
Mr. George Fox, of Kingsbridge, and Mr. S. Bevan Fox, of Exeter,
have for some years each kept one stock attached to a "Salter's
Circular Spring Balance," suspended from a beam under a shed,
and, from experience, find that from a hive so balanced a criterion
may be formed of what other hives in the apiary are doing through
the day.
Many ingenious contrivances will, no doubt, suggest themselves
to the apiarian for suspending hives in this manner. For instance,
instead of the cord being tied round the hive, three or four strong
irons, with a screw at one end and a ring at the other (known by iron
mongers as "eyes"), could be screwed into the floor-boards, to which
the attachments might be made fast. It will scarcely be necessary to
hint that great care is necessary that full provision should be made
securely to support the increasing weight; a fall would be most
ruinous, and terribly enrage the bees.
The weight of the hive should be marked on it when empty, so
that the exact amount of its contents may at any time be ascertained.
A colony of bees at Michaelmas ought to weigh from 20 to 24 lbs.,
that is, exclusive of the hive; if falling short of that weight, the hive
should be made up to it by the artificial means before recommended.
Experienced apiarians are able to judge of the weight of a hive by
lifting it a few inches from the stand; or by looking in at the windows
of a stock-hive, a conclusive opinion may be formed as to the state
of the colony. If the combs within view be well filled and sealed, it will
be safe to consider that the hive contains sufficient stores to carry
the bees through the winter.
VI. MISCELLANEOUS INFORMATION.
STINGS: THEIR PREVENTION AND CURE.
OME of our readers may deem us neglectful in having, as it
were, left them to struggle through their bee-keeping novitiate
without informing them how to avoid being stung by their docile
but well-armed flock. Of course, having described the bee-dress, we
have supposed that the apiarian was clad, if not "in complete steel,"
at least in the head-gear and gloves, which will render him
invulnerable. The best safeguard from the anger of bees—as,
indeed, from the malice of men—is a quiet and peaceable spirit. The
apiarian will learn to handle his bees not only as "if he loved
them,"—as the quaint angler says—but as if he fully believes that the
bees love him. This they will do whenever he approaches and treats
them gently. There are some cases of exception to this generally
peaceable disposition of the bee; perchance a few bees are
dyspeptic, and refuse to be pacified, let their master seek to bribe
them never so wisely. Then, too, sometimes the bee-master himself
may be dyspeptic, which the unerring olfactory sense of the bees
speedily detects, and their anger is immediately aroused. Some few
persons, owing to constitutional peculiarities in their breath or
insensible perspiration, are objects of constant animosity with bees,
who, by driving them from the apiary, are giving a physician's advice
without charge for a fee. Some of the choicest perfumes used by
ladies are offensive to bees; and one may feel very certain that the
"fine puss gentleman," who disgusted the brave Hotspur with his
"pouncet-box" and praise of "'parmaceti for an inward bruise," would
have been speedily driven from an apiary in ignominious flight.
Occasionally, even a skilful apiarian may inadvertently crush a single
bee; such a mischance is detected by the community with much
more facility than by any "crowner's quest," and their prompt verdict
decrees the summary punishment of the offender. There would be
much less fear of stings if it were always remembered that bees are
never aggressive. "Defence, not defiance," is their motto. They
scarcely ever attempt to sting when away from the hive, and very
seldom indeed at the time of swarming, for then they are gorged with
honey. When molested by angry bees, do not attempt to beat them
off; the safest and best retreat is a green bush. Thrust your head into
this, or if no such refuge be near, in an emergency, throw yourself on
the ground, and, with face downwards, the bees will soon leave you.
Yet some people appear to think they must inevitably be stung if
they meddle with bees and for their sakes it is needful to explain why
it is that a sting is painful, and how the wound inflicted by the bee
may be cured. Those familiar with the usual microscopic objects will
know how marvellously delicate, and yet effective, is the mechanical
structure of a bee's sting. (See page 46.) This weapon, as we see it
with our naked eye—finer than a needle's point—is only the sheath,
which lengthens or contracts like the tubes of a telescope. The dart,
as before said, is barbed on each side, so that the bee, when very
angry, is scarcely ever able to withdraw it, but
"Deems life itself to vengeance well resigned;

Dies on the wound, and leaves the sting behind."
There are, indeed, some happy mortals whose "blood such an even
tenour keeps," that a bee-sting is to them simply a puncture, and
nothing more. Dr. Bevan has suggested that lovers should subject
themselves to the ordeal of a bee-sting, in order to prove, we
suppose, that their temper is proof against "the stings and arrows of
any outrageous fortune" that matrimony can bring.
It is the homoeopathically minute tincture of poison injected by
the bee which causes inflammation. The first thing to do is, to
remove the sting, which, even when detached from the bee, will
continue to penetrate still further into the wound. Next, press the
hollow point of a watch-key exactly over the place stung; this will
express a considerable portion of the virus. Then dip the hand, or
bathe the part with cold or tepid water, for the poison is volatile, and
will thereby be dissipated to a great extent. On no account whatever
should the part affected be rubbed; to do that will diffuse the poison
and increase the inflammation. The specific remedy for a bee-sting is
taught us by chemistry: the venom is an acid which an alkali will
immediately neutralize when brought into contact with it. Spirits of
hartshorn will generally be found effectual for the purpose, and
should always be kept in an apiary. There are also several other
remedies more or less effectual, according to the special constitution
of the patient. A strong infusion of tobacco-water applied to the
wound after the sting has been extracted is a specific for many
persons; others find relief from the application of a sliced onion.
We have heard the remark from several who have kept bees for
years, that the poison from a sting has little or no effect on them;
after receiving many inflictions, their flesh appears to become so little
affected, that the swelling and pain at one time experienced no
longer trouble them.
POLLEN, OR FOOD FOR INFANT-BEES.

Bees, when fully grown, feed almost wholly on honey; but the
larvae require for their development a more substantial kind of
nourishment. Such solid fare is found by the bees in the pollen of
flowers, a farina which contains some of those nitrogenous elements
in which honey is deficient. The body of a worker-bee is covered with
hairs, to which the pollen adheres when, by contact with the bee, it is
rubbed from the anthers and stamens of flowers (see page 41).
Dewy mornings or humid bowers suit the bees for the gathering of
the pollen. If the atmosphere be too dry for kneading it into pellets,
they roll themselves in the blossoms and trust to the good offices of
the bees at home, who, on their return, brush off the farina into the
cells intended for it. A portion of this "bee-bread" is taken at once by
the "nursing bees," who are supposed to subject it to some change
before offering it to the larvæ; but the greater part of the pollen is
stored away and sealed over in the cells for future use. In April and
May, the bees are frequently busy "all the day" in gathering pollen,
and often one community of bees will collect about twenty pounds
weight of "bee-bread" in one season.

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CHAPTER 9 Property, Plant, and Equipment and Intangibles 588

Focus on Financial Statements 720 Mid-Chapter Demonstration Problem 787

Focus on Financial Statements 878 CHAPTER 15

Demonstration Problem—Direct Method 1009 Ratio Analysis 1070

Inside the Chapters

the student has just read. Read–Do–Check–Apply reinforces active

Demonstration Problems, and end-of-chapter material.

CRITICAL THINKING CHALLENGE

students develop the skills related to questioning.

IFRS AND ASPE—THE DIFFERENCES IFRS AND ASPE—THE DIFFERENCES

***ASPE, Accounting Standards, Section 1000.19–20.

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NEW: A LOOK BACK, A LOOK AT

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DECISION MAKER Answer—End of chapter

EXTEND YOUR KNOWLEDGE (EYK)

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Telus (without the notes), are repro-

“We are what we

2014 annual report

GUIDANCE ANSWERS TO DECISION MAKER

Guidance Answers to CHECKPOINT

DEMONSTRATION PROBLEM Problem Material

payments at the end of August, September, and October.

questions. These promote critical thinking and give

Concept Review Questions CONCEPT REVIEW QUESTIONS

QUICK STUDY Quick Study

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Exercise 6-3 Specific identification cost flow assumption LO2 EXERCISES

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Owners are partners

Taxed as a separate legal entity

Ethics Challenge ETHICS CHALLENGE

FOCUS ON FINANCIAL STATEMENTS Focus on Financial Statements

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General Updates engaging topics, and including inspiring sto-

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Fifteenth Canadian Edition Reviewers

ADVANTAGES OF BAR AND FRAME HIVES.

CHANGING OLD STOCKS TO NEW HIVES.

WEIGHING HIVES, &c.

A hive can very easily be weighed, if a Salter's Spring Balance be

"Deems life itself to vengeance well resigned;